CN, TCRC reach agreement to end strike

The strike by locomotive engineers at CN will end
immediately as a result of an agreement to resolve the parties' contractual
disagreements through further negotiations and, if necessary, binding
arbitration. The union began its strike Nov. 28 and the agreement came after
Ottawa introduced "back-to-work" legislation on Monday to end the strike.

CN and the Teamsters Canada Rail Conference have agreed to
continue negotiations to resolve all issues related to wages, benefits and work
rules. If there is no agreement, the parties' wages and benefits offers will be
subject to final, binding arbitration.

The key issue leading up to the strike was CN's decision to
increase engineers' wages by 1.5 percent and raise its monthly mileage cap to
4,300 miles from 3,800 miles. TCRC-represented conductors currently have a
4,300-mile monthly cap and TCRC-represented engineers have a 3,800-mile monthly
cap. Under the new rule, both groups working in a cab would be held to one
consistent standard.

As part of this process, CN will roll back the monthly
mileage cap for locomotive engineers to the previous 3,800 miles from the
4,300-mile cap initiated Nov. 28, and withdraw its plan to apply a 1.5 per cent
wage increase to TCRC members. The union's current contract expired on Dec. 31,
2008.

The parties can also agree to submit work-rule issues to
binding arbitration but only if they mutually agree on the ones that should be
subject to arbitration. If there is no agreement, the issues in dispute will
not be subject to arbitration.

E. Hunter Harrison, president and chief executive officer,
said, "CN is pleased that an agreement has been reached to end the strike by
the Teamsters Canada Rail Conference immediately and to move forward with a process
that gives the parties flexibility to negotiate issues further, but also
ensures finality through binding arbitration of issues that remain in dispute.
We have always sought, since starting negotiations 14 months ago, to achieve a
settlement with the TCRC through negotiations or binding arbitration."